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Congress Goes Home Leaving Social Security Administration Without a Director – Again

Let’s take quick stock of what this lame duck Congressional session has meant for middle-class Americans, especially seniors and their families:
  1.  Legislation that reversed 40 years of federal law protecting retirees’ pensions was tucked quietly into the massive spending bill. The change will allow benefit cuts for more than 1.5 million workers; many of them part of a shrinking middle-class workforce in businesses such as construction and trucking.

 2.   $42 billion in largely corporate tax breaks was passed without the “pay-fors” demanded by Congress for virtually every other spending provision. According to the Congressional Budget Office, if Congress keeps passing short-terms extensions every year or two, the tax breaks will cost $700 billion over the coming decade.  As Citizens for Tax Justice so aptly put it: “If our government has $700 billion to spare, it should be devoted to paying for things we really need, not wasted on corporate tax giveaways.”

3.   Congress has headed home for the holidays without confirming a Director of the Social Security Administration.  This is after nearly 18 months without a permanent agency head at a time when the agency faces the largest workload increase and budgets cuts it’s faced in its history.

Since we’ve already written about the first two items, we’re going to fill in the details on the third, including why it matters so much to Social Security beneficiaries.  Social Security expert, Eric Laursen provides this recap:

“Republican senators are upset about delays and cost overruns on a new computer system at the Social Security Administration—so upset, they have blocked President Obama’s nominee for commissioner. The only the trouble is, the new computer system was planned and ordered up by the prior commissioner—a George W. Bush appointee.”

“A lot of this is simply hyperventilating. It’s not clear that the GOP senators “received information from whistleblowers,” as they claim. What happened for sure was that an interim report from the Social Security Administration’s inspector general said that officials at the SSA may have misled Congress about aspects of the $300 million computer system. The report stems from an investigation that Colvin herself ordered after she took over from Astrue early last year. And when the senators point their fingers at “the activities of certain members of your immediate office” in their letter, they would be referring to officials who were in place under Astrue as well. Yet the tone of their letter suggests, misleadingly, that Colvin herself may be under suspicion.”

“It’s been an article of faith for Republicans from the early days of the Reagan administration that the heads of agencies like the SSA must not come from within the agency itself. If at all possible, they must be strongly conservative critics who are committed to “reforming” it by shrinking it and pushing back against its unionized workforce. The less experience they have with the day-to-day running of a big, complex agency like the SSA, the better. Astrue fit that bill. Colvin, by contrast, represents the so-called “permanent government” Republicans are determined to break. That they were ready to exploit any chink in her armor, however unfair, should have been foreseeable.”

Colvin’s qualifications to be SSA’s Director are undeniable, as NCPSSM’s President/CEO, Max Richtman, told the Senate in a letter last week:

“Ms. Colvin has extensive experience with the Social Security Administration (SSA) that makes her uniquely qualified to provide leadership to this vitally important agency. She has been Acting Commissioner of SSA for more than a year and, before that, had served since 2010 as the agency’s Deputy Commissioner. In addition, she has in the past held a number of other key executive positions at Social Security headquarters, including Deputy Commissioner for Programs and Policy and Deputy Commissioner for Operations.

The broad-ranging nature of Ms. Colvin’s experience has provided her with the knowledge and the temperament to lead SSA through the years that lie ahead. We personally know her to be a woman of great integrity and respect the compassionate leadership she has displayed throughout a long and distinguished career.”

Why does this matter to beneficiaries?  Because the Social Security Administration needs a leader in place to tackle the challenges ahead.  Leaving the agency in limbo leaves it vulnerable to even further attacks virtually guaranteed with the new Congress:

... as Social Security faces the sharpest increase in its workload and its most bitter political challenges since its creation in 1935, it will continue to chug along without an official commissioner. Colvin, 72, will stay on as acting commissioner, a post she has held since February 2013.”

“...there's no reason to doubt Colvin's commitment to Social Security, which she served as a high-level executive from 1994 to 2001, returning in 2010 as deputy commissioner. As Paul Van de Water of the Center on Budget and Policy Priorities observes, Colvin has to work with the budget cards she's dealt: "She been doing a good job under very difficult circumstances, with a continually shrinking real budget," he said.

Indeed, the problem is Social Security's budget -- and the Democrats' failure to safeguard it. The crisis emerged in 2011, when Congress started to pare the president's budget requests for the Social Security Administration. From then through fiscal 2013, Social Security got $2.7 billion less than the president sought. Some of the shortfall was restored this year, but most of the increase was designated for anti-fraud programs, not pure administration.”

Michael Hiltzik at the Los Angeles Times asks, “Are the Democrats allowing Social Security to Twist in the Wind?”  We think that’s a very good question.

Congress Sends Millions of Retirees a Holiday Present – An Historic Pension Cut

Tucked into the massive spending bill Congress passed this weekend was legislation that reversed 40 years of federal law protecting retirees’ pensions.  The change will allow benefit cuts for more than 1.5 million workers, many of them part of a shrinking middle-class workforce in businesses such as construction and trucking. There wasn’t a single Congressional hearing on the plan before it was slipped into the spending bill, outraging senior’s advocates...including NCPSSM.

“Allowing plans to break the fundamental ERISA promise - that pensions paid to retirees and their surviving spouses will not be reduced - represents an extreme response to a problem that can be addressed through other means by strengthening the funding of the Pension Benefit Guaranty Corporation.

Additionally, the National Committee is deeply concerned that this provision could set a dangerous precedent for other defined benefit programs, such as single employer plans, public sector plans and Social Security. We believe a change this fundamental to the retirement security of Americans should be subject to a Congressional hearing and should be considered by the appropriate committees, with legislative language reviewed by Congress and the public, particularly those who will be affected by these reductions.”  Letter to Congress -  Max Richtman, NCPSSM President/CEO

Senate Finance Committee Chairman, Sen. Ron Wyden (D-OR), shares our concerns as he described to the Wall Street Journal:

“Some Democrats in particular were uneasy with the solution, saying it is being rushed through Congress and could create a dangerous precedent encouraging other retiree benefit cuts.

‘This is unprecedented and I worry about the impact on retirees and the slippery slope we’re about to head down,’ said Sen. Ron Wyden (D., Ore.), the Finance Committee chairman, in a statement. ‘I am working hard to protect retirees’ pensions, and jamming this bill through Congress virtually sight unseen is no way to solve this issue.’ “

In fact, some House Republicans see this pension cut strategy as an example of how Congress should handle Social Security in the new GOP controlled Congress.  Make no mistake about it, Congress needed to come up with a long-term solution to the multi-employer pension shortfall; however, there was no urgency plus there were other options beyond a cuts-only solution hitting current retirees with no way to prepare for a cut in their income.

“Wall Street banks, automakers and insurance giants got bailouts during the economic meltdown that started in 2008. But when it comes to the pensions of retired truck drivers, construction workers and mine workers, it seems that enough is enough.” Time.com

‘It bothers me no end that we have Congress and legislators that think that the proper way to correct problems that banks and corporations made is to take it out on the workers,’ said Dave Cook, president of Local 655 of the United Food and Commercial Workers.”  St. Louis Post Dispatch

The Pension Rights Center has a calculator on its website that lets retirees under age 75 see how much their pensions might be reduced under the bill.

 

NCPSSM Urges Senate to End Inequity Facing Older Women

NCPSSM Board Chair, Catherine Dodd, testified before the Senate Finance Committee today on the retirement challenges facing America's women and the National Committee's Eleanor's Hope initiative to improve Social Security benefits:

“22 million older women receive Social Security benefits yet the inequalities they face threaten their retirement security. Persistent gender wage discrimination, work gaps taken to care for loved ones, the lack of pensions and generally longer lives mean women receive a significantly lower Social Security benefit than men.  While the Social Security system is gender-neutral, life is not and America’s senior women pay the price for that inequality for as long as they live. We urge Congress to level the playing field for millions of our nation’s older women.”  Catherine Dodd, PhD, RN and NCPSSM Board Chair

Members of the Senate Finance Committee heard testimony from witnesses today in a hearing entitled, “Social Security: Is a Key Foundation of Economic Security Working for Women?”  National Committee to Preserve Social Security and Medicare Board Chair, Catherine Dodd, urged the Senate to address the inequities that reduce the average monthly Social Security benefit for women.  In 2012 the average woman retiree received $1,103 a month while a retired man received a $1,414 monthly benefit.  The National Committee believes women deserve an adequate retirement income whether a work life is spent in the home in the paid workforce or a combination of the two.  Toward that end, our new initiative, Eleanor’s Hope -- named in honor of first lady and activist Eleanor Roosevelt -- is mobilizing women of all ages to advocate for income equality, retirement security and health protection for women.  

Some of the National Committee’s proposals for improving benefits in Social Security presented to the Senate Finance Committee today include:

·         Providing Social Security credits for caregivers

·         Improving Social Security survivor benefits

·         Equalizing Social Security’s rules for disabled widows

·         Strengthening the Social Security Cost of Living Allowance

·         Boosting the basic Social Security benefit of all current and future beneficiaries

You can see Catherine Dodd’s full Senate testimony here.

 

 

Conservatives Claim We Can’t Afford Social Security & Medicare While Passing Billions in Corporate Tax Breaks...Again

Virtually the first order of business for Congress after November’s Congressional election was to pass $42 billion in tax breaks going largely to corporations.  The House has already approved these giveaways (without providing the “pay fors” they’ve demanded for bills to help average Americans like unemployment extensions or even disaster relief) and the Senate is expected to follow suit this week.  Incredibly, it could have been much worse as the House originally wanted ten times more in corporate giveaways.  A veto threat from President Obama is all that derailed that plan.  Bill Moyers detailed the original package

“The 10-year, $444 billion package includes a few provisions that were popular with Democrats, but would phase out existing tax credits for clean energy development. Mostly, it’s a boon for some of the top corporate tax-avoiders in America. Some 90 percent of the cuts would benefit their bottom lines. One of the biggest beneficiaries would be GE, which, according to Citizens for Tax Justice, claimed tax refunds of $3.1 billion on $27.5 billion in profits between 2008 and 2012. That means the company had a negative tax rate of 11 percent. Other big winners would include Wall Street financial firms, pharmaceutical companies and computer and Internet businesses.” 

Frank Clemente, executive director of Americans for Tax Fairness, highlights one especially outrageous provision in this legislation: 

“The most disturbing part of this legislation is it provides $6.2 billion in tax breaks to companies that ship profits offshore. One of these loopholes – the Active Financing exception, otherwise known as the GE Loophole – benefits General Electric and big Wall Street banks. Congress should be closing offshore tax loopholes, not continuing them.” 

Citizens for Tax Justice offered this analysis: 

Here are just a few of the problems with H.R. 5771: 

Most of the tax breaks fail to achieve any desirable policy goals. For example, they include bonus depreciation breaks for investments in equipment that the Congressional Research Service have found to be a “relatively ineffective tool for stimulating the economy,[1] a tax credit for research defined so loosely that it includes the work soft drink companies put into developing new flavors,[2] and a tax break that allows General Electric to do financial business offshore without paying U.S. taxes on the profits.

The tax breaks cannot possibly be effective in encouraging businesses to do anything because they are almost entirely retroactive. The tax breaks actually expired at the end of 2013 and this bill will extend them (almost entirely retroactively) through 2014. These tax provisions are supposedly justified as incentives for companies to do things Congress thinks are desirable, like investing in equipment or research, but that justification makes no sense when tax breaks are provided to businesses for things they have done in the past.

The bill increases the deficit by $42 billion to provide tax breaks that mostly benefit businesses, even after members of Congress have refused to enact any measure that helps working people unless the costs are offset. The measures that Congress refused to enact without offsets include everything from creating jobs by funding highway projects[3] to extending emergency unemployment benefits.[4] 

As we’ve said before, budgeting is all about priorities.  Did you cast your vote in November supporting candidates who promised to drain billions of dollars from federal revenues for America’s largest corporations, while simultaneously claiming our nation can’t afford programs benefiting average Americans like Social Security and Medicare? 

Probably not. However, that’s exactly the course currently being charted in the lame duck and beyond to the 114th Congress.

Happy Thanksgiving!

We would like to wish everyone a Happy Thanksgiving and safe travels this week!

 

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